To: Executive Vice President
From: Yvonne Dixon and Teammates
Subject: Last In/First Out (LIFO) versus First In/First Out (FIFO) Date: February 13, 2012

Executive Vice President, Late last week our team had a team meeting to discuss LIFO versus FIFO methods of inventory for the Cost of Goods Sold (COGS) as to our company needs. This was a very lengthy and well communicated process for our team. I feel that we as a team have worked to give you the best information needed for you to provide to the board. Once this information is gone over by you and the board, you will be able to make the appropriate decision and give us the feedback when you are able to. As we are coming into an economic time period of inflation, it is possible that we may recommend that the company continues to use LIFO so that we continue to reduce our federal and state corporate income tax. This could provide the company with a better cash flow along with having a better profit margin. The question we have researched and discussed was, “Do we think this economic situation will continue so that our COGS will be increasing over the short and long term and why our inventory costs keep rising.” As we all know using either LIFO or FIFO for our inventory method will have an effect on our Profit and Loss Statements. If costs go up, as we are expecting next year, we may want to move to using FIFO. However, if the costs stay as there are now, we will want to stay with the use of LIFO. The LIFO method is described as follows: the income statement reflects a lower income because the COGS are higher and on the balance sheet the inventory value is lowered. The FIFO method is described as follows: the income statement reflects a higher income because the COGS are lower and on the balance sheet the inventory value is higher. No matter which inventory method we choose to use, we must continue to use it throughout the remainder of the year as well as next...

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...﻿ University of Phoenix Material
AccountingMemo
interoffice memo
to: Accounting Team mate
from: Andrew Accountant
subject: LIFO FIFO explanation
date: 6/10/2015
Team-mate
We need to get together later this week—boss has requested we give her an overview of Last In/First Out (LIFO) versus First In/First Out (FIFO) as it might apply to our company. She needs the background info to present to our president and the board late this month. This is to help management make the decision of which inventory valuation method the company should used.
Because we may be coming into inflationary economic times, it is possible we might recommended that the company continue to use LIFO so we can continue to reduce our federal and state corporate income taxes—this could provide the company with a better cash flow and profit margin. The question we need to research and discuss is whether we think this economic situation will continue so that our Cost of Good Sold (COGS) will be increasing over the short and long term and our inventories cost keep rising.
As you know, choosing LIFO or FIFO for inventory will affect our P&L statements. If costs stay where they are now, we will want to see how we can move to LIFO. If costs go up as we expect next year, we should stay with FIFO inventory.
FIFO= Income statement reflects a higher income because the COGS is lower in value; inventory on balance sheet has higher value.
LIFO= The income...

...﻿Date: 2/19/14
To: CEO of LOL
From: Auditor
Re: The realization and valuation of DTAs
Mr. CEO:
The following paragraphs explain why a valuation of temporary taxable differences is necessary and how, with the guidance of the Accounting Standards Codification (ASC), we came to this conclusion. According to ASC 740-10-30-23, "The more negative evidence that exists, the more positive evidence is necessary and the more difficult it is to support a conclusion that a valuation allowance is not needed for some portion or all of the deferred tax asset. A cumulative loss in recent years is a significant piece of negative evidence that is difficult to overcome." The fact that LOL is in a cumulative loss position, has experienced historic losses, and has recently lost a significant customer supports the above quote and is the foundation to our recommendation. This lack of positive evidence proves that it is more likely than not that future taxable income will not be able to fully realize the DTAs. Other components, such as sources of future taxable income, tax planning strategies, historic data, and events currently affecting future taxable income were considered in our evaluation of LOL's situation, and the evidence gathered is presented as follows.
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...TO: EXECUTIVE PICE PRESIDENT
FROM: ACCOUNTING TEAM MATE
SUBJECT: LIFO-FIFO EXPLANATION
DATE: SEPTEMBER 20, 2010
EXECUTIVE VICE PRESIDENT
The overview of Last In/First Out and First In/Last Out is now completed for the date and time of your choice to discuss the company matters. The information from last month is was completed at the end of the month and the present is kept current on a daily base as management needs to be up to date of the inventory and financial levels of the company.
Reducing federal and state income corporate taxes are important as this may allow the company to see a decrease in expenses over the time. Looking at the expenses of the company and viewing the incomes of the employees will allow the company to make the decision as to Last In/First Out or First In/Last Out to save the company finances. Although looking at the inventory will allow the management to view the Last In/First Out and First In/Last Out as to the timing of the inventory growth.
Using First In/Last Out will allow the company to still grow as the inventory increases and the company will still profit. Using Last In/First Out will allow the company to be at a stand point and no increases are made. Understanding the decision that is made must be final, this information will be viewed and continued to be up to date for any financial issues that may arise before and after the meeting and decisions are made.
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